(CNN)—It’s early, and State of the Union is bringing you the best of the Sunday headlines to go with your morning coffee.
On our radar this morning: The aftermath of the midterms, the fate of the Bush tax cuts, and the future of Speaker Pelosi.
Check out what we’re reading, and don’t forget to watch the show at 9am and 12pm ET.
GOV. RICK PERRY
Some Republican lawmakers — still reveling in Tuesday’s statewide election sweep — are proposing an unprecedented solution to the state’s estimated $25 billion budget shortfall: dropping out of the federal Medicaid program.
REP. CHRIS VAN HOLLEN
In the process, Van Hollen became one of the public faces of Democratic defeat – even though it's hard to imagine how anyone in his position could have done any better. In addition to historical midterm trends that pointed to major attrition, Democrats found themselves facing an electorate unhappy with the direction of the country and the state of the economy. Can you say political powder keg?
Toomey said he'd prefer to make all the tax cuts permanent, but didn't draw a hard line.
CONGRESS AND THE MIDTERMS
While we are deeply affected personally and politically by the loss of excellent members of our Caucus, nevertheless we hope those colleagues will continue the fight and rejoin us again in two years.
There also is an economic case being made against quick spending cuts. Many analysts argue that reductions would damage the fragile recovery by stemming the flow of federal dollars into the economy. They urge adoption of budget cuts now, while delaying their start for one or two years, when the US economy would be in better condition to withstand the spending reduction. “There is no question that we need to get our deficit under control, but this is not the time to do it,’’ said Nariman Behravesh, chief economist at IHS Global Insight, a research firm with headquarters in Lexington.
Republicans now hold at least 93 of the 131 House seats from the states of the old Confederacy. Less than 20 years ago they did not even hold half. With the defeat of long-serving fiscally conservative Blue Dogs like Representatives Gene Taylor of Mississippi and John M. Spratt Jr. of South Carolina, Southern white Democrats in Congress have become as rare as a Dixie blizzard.
PRES. OBAMA AND THE MIDTERMS
"There doesn't seem to be anybody in the White House who's got any idea what it's like to lie awake at night worried about money and worried about things slipping away," said retiring Tennessee Gov. Phil Bredesen (D). "They're all intellectually smart. They've got their numbers. But they don't feel any of it, and I think people sense that."
AFTER his “shellacking,” President Obama had to do something. But who had the bright idea of scheduling his visit to India for right after this election? The Democrats’ failure to create jobs was at the heart of the shellacking. Nothing says “outsourcing” to the American public more succinctly than India. But the White House didn’t figure this out until the eve of Obama’s Friday departure, when it hastily rebranded his trip as a jobs mission. Perhaps the president should visit one of the Indian call centers policing Americans’ credit-card debts to feel our pain.
The president can't do much to make the economy recover more quickly, and he hasn't found a way to make his healthcare law more popular, but he still has the powers of his office in foreign policy. In diplomacy, unlike domestic policy, a president can act first and worry about Congress later.
Sen. Lindsey O. Graham (S.C.), who has become a leading GOP national security spokesman, said that if Obama is looking for cooperation with Republicans, a continued U.S. military effort in Afghanistan is "one area where Republicans feel comfortable standing by the president" and are likely to give him more support than many in his own party.
Two years ago, a lot of people—myself included—really believed that all those online activists who helped elect Barack Obama were going to stick around and support him as he pushed through a sweeping list of progressive measures. Instead, those idealistic young folks have all dried up and blown away, while Tea Party people like Sarah Palin have used Facebook, Twitter, and other social media to lead a backlash.
Some Democrats suggest as a new bargaining position an income cutoff of $1 million instead of $250,000, arguing that would better define Republicans’ priorities rhetorically. As Mr. Obama said on Saturday, “I believe we can’t afford to borrow and spend another $700 billion on permanent tax cuts for millionaires and billionaires.”
Republican lawmakers said, for example, that they would propose limiting the money and personnel available to the Internal Revenue Service, so the agency could not aggressively enforce provisions that require people to obtain health insurance and employers to help pay for it. Under the law, individuals and employers who flout the requirements will face tax penalties. Moreover, Republican leaders said, they plan to use spending bills to block federal insurance regulations to which they object. And they will try to limit access to government-subsidized private health plans that include coverage of abortion — one of the most contentious issues in Congressional debate over the legislation.
Shortly before Election Day, Reid promised during an interview with Univision, a Spanish-language television network, that he would bring the DREAM Act up for a vote before the end of the year. Reid has also given assurances to labor officials that he will bring the Public Safety Employer-Employee Cooperation Act, according to a senior labor official. The bill would set minimum standards for state collective bargaining laws for firefighters and police officers.
He flew on the presidential helicopter into Mumbai with W. James McNerney Jr., chairman and chief executive of Boeing Co. White House officials sent the chief executives of PepsiCo Inc., Honeywell International Inc., McGraw-Hill Cos. and AES Corp. to brief the press before any senior administration official spoke up. Then the White House unveiled a relaxation of export controls to India long sought by business, as well as a raft of new export deals, including nearly $7 billion worth for Boeing. "Having the president here, it helps," Mr. McNerney said.
“The statute of limitations of attacking President Bush has passed,” said Don Stewart, a spokesman for Senator Mitch McConnell of Kentucky, the Republican leader. “They spent a lot of time attacking President Bush, and they got unelected.” Still, the newly elected Republicans are dancing gingerly around Mr. Bush as he returns to the public stage. In a way, they are borrowing from President Bill Clinton and “triangulating” not only away from Mr. Obama but also from Mr. Bush. Many Republican candidates, particularly those with Tea Party roots, ran against the former president’s spending policies and Wall Street bailout. In his election night victory speech, Representative John A. Boehner of Ohio, the presumed new House speaker, vowed “to take a new approach that hasn’t been tried before in Washington by either party.”
Most important, there can be little doubt that, whatever policies emerged, she would have maintained a laser focus on the economy; after all, she did that during the 2008 campaign, when it wasn't as central an issue. She got little credit, for example, when she gave a speech in Iowa in November 2007 warning about the dangers of new financial instruments. Now, it seems prescient; then, it sounded boring.
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